A common question often asked about payday loan debt is “can I get arrested for defaulting on a payday loan?” There are two main reasons why this question is raised. First, many unethical or illegal collection agencies will insinuate or claim outright that you can be arrested if you do not pay a payday loan debt. The second is that bad check laws do allow for criminal prosecution of those who write bad checks and since payday loans often require a check, consumers fear these laws will be used against them in a payday loan collection situation. Here we give you the straight facts on payday loan debt and arrest.
Payday Loan Collectors – Implying that you can be Arrested for Payday Loan Debt
Unfortunately, it is an all to common practice for Payday Loan Collection Agencies to imply that consumers can be arrested for payday loan debts. In some cases, these payday loan collection agencies have had fines or actions taken against them by the FTC or other state attorney generals for claiming to debtors that they can be arrested if they do not pay. However, the more frequently used approach is to imply that being arrested is a potential repercussion of not paying.
Some techniques used by payday loan collectors to imply this include: 1) referring to consumers with multiple overdue or defaulted payday loans as “repeat offenders,” 2) asking the debtor if they know that writing a bad check is illegal in their state. Technically, this is true. However, the payday collectors omit that this does not apply to checks written in the process of getting a payday loan, or 3) telling customers that they “will be located and addressed in accordance with city and state law” if they do not pay their debt by a certain time (usually the same day). Again, this is technically accurate. But, what “located and addressed” means in this case is that they will find your address and mail you a letter. Payday Loan Collection Agencies use these ambiguous statements to purposely mis-lead consumers. While the statements above are not factually false, the Payday Loan Collectors are well aware of the misunderstanding that they are creating and do nothing to clarify it in most, if not all, cases.
The Truth About Payday Loans and Criminal Charges
Quite simply, the answer is that defaulting on a payday loan will not result in criminal charges in any state within the United States. Bad Check Laws are designed to protect merchants from having someone “buy” goods with a bad check, thereby essentially stealing. They are not designed to protect Payday Loan Companies who know that they are taking a risk that a consumer will not pay a loan back. However, there are other important repercussions associated with not paying a payday loan, including the potential that consumers will be sued in civil court (usually small claims courts). This can lead to a writ of garnishment being filed and customers having their wages garnished. Even being sued in small claims court will result in you being served by a process server, an experience that can be very embarrassing, especially if it happens at your place of employment. Many payday loan companies will also report to bad check databases, such as SCAN, and that may prevent you from getting a bank account in the future. Additionally, most Payday Loan Collection Agencies will now report your debt to the major credit bureaus which will impact your credit. So, there are definite repercussions to not paying a payday loan when it is due, however, going to jail is not one of them.
Quick House Sale
I had heard that Federal loans are a bettter deal. Anyone?????
How do we work through the maze of financial aid. Any advice on available scholarships that might be easy to obtain?
Sell and Rent Back
I’m currently thinking of applying on all three this summer. I have a full-time job but seeking to replace with a part-time job to pay my bills and make room for school. I plan on applying for 2 loans: $10,000 for auto and another $15,000 on student loan. I have limited credit history of 8 months with a credit score ranging from 640-660 maybe even at 680 due to regular payments on my 2 credit card bills. I’ve had my current job for a year and a month but working here won’t get me anywhere that is why I decided to further my career by going back to college. I am also currently applying for my financial aid as a full-time student to help out with school’s tuition and expenses. I could probably deal with $400-500 a month payments for the two loans and I have minimal payments for my living and misc expenses. But would this be a good decision? I need experienced individuals to advice and give suggestions pls. Thank you very much!
Real Estate Professionals
I just started a debt consolidation plan. I had to because I am having a baby in March and need to be able to save some money before she arrives rather than stressing over credit card payments, fees, etc. I have already resigned to the fact that my credit will be in the toilet for awhile.
U.S. mortgage fraud reports jumped 36 percent last year as desperate homeowners and industry professionals tried to maintain their standard of living from the boom years, the FBI said on Tuesday. Suspicious activity reports rose to 63,713 in fiscal year 2008, which ended last September, from 46,717 the year before. California and Florida, centers of the housing bust, had the highest numbers of suspicious reports as foreclosures jumped, the stock market dropped and credit dried up. “Industry employees sought to maintain the high standard of living they enjoyed during the boom years of the real estate market and overextended mortgage holders were often desperate to reduce or eliminate their bloated mortgage payments,” it said. Reports filed through March put fraud reports on track to top 70,000 in the current fiscal year, the agency said.
When you mandate mortgage fraud, you shouldn’t be too surprised when you actually get it.
Of course it is those greedy ‘industry professionals’ who are to blame. Or is it?
I dont want my credit score to go down. but i keep paying my CC and its like nothing is changing.
Sell and Rent Back
I went thru the FAFSA process and was denied a grant but the school helped me get a secured government student loan (government makes the intrest payments and I just have to pay the principal when I complete school). I wanted to know what that loan can be used for besides tuition. I already signed up for classes and used my loan for the tuition, but I need some books and I also need Office 2007 for school papers. I dont currently have an office suit. I know i could get open office for free and will use that as a last resort because I have had problems in the past with that. Can I buy my books and Office 2007 with my loan or does that have to come out of pocket? Any advise or direction would be helpful.
Sell House Quick
These crooks known as Sallie Mae have screwed me. Two years ago I started receiving my student loans, and the interest rate at the time was only 2%. I even have a sheet of paper stating that.
My total in loans was $42,000.
I get my statement in the mail last week and suddenly I owe them $57,000 and they jacked up my interest rate to nearly 18%. I nearly cried. I called Sallie Mae right away stating, I cannot pay $688.00 a month it is just ludicrous.
I only have a couple more weeks to find a cheap, but very respectable loan consolidation company. My sister uses Nelnet, but they haven’t gotten back to me yet.
For all of you college graduates what is a cheap, but VERY respectable and honest Student Loan Consolidation company?
You can email me with details if you’d like.
I believe that I am a victim of mortgage fraud and total loss is about $500,000.00 I already contacted FBI and also hired private attorney to file a lawsuit against the lender, seller, appraiser, realtor and the title company. To make a long story short .I bought a property which was inflated by the seller , over a half million dollars. The loan officer from the lender, appraiser, realtor, and the title company eventually helped seller to flip the property which means they all lied to me about everything. (I have all the evidences)
Please assume that I have a strong case – (Just for civil case) how much would be reasonable for me to ask the lender to compensate – I want to be a reasonable person and my lawyer and I have a little different opinion for this matter. I need a second opinion from others.
P.S. Previously I had a meeting with the president of the subject lender. He treated me as if I was a begger who is trying to make fortune out of this case. I was sad.
Quick Property Sale